QV House Price Index, December 2023: Housing market stalls – now what’s in store for 2024?

Slow and steady growth appears to be on the cards for Aotearoa New Zealand’s housing market in 2024, as evidenced by a general stalling in home value growth this quarter.

The latest QV House Price Index shows home values have increased across all of the main urban centres we monitor, but at a reduced rate overall nationally. The average home value increased nationally by just 0.6% throughout the December quarter to $905,070, down from the 2.3% quarterly home value increase reported at the end of November.

Across the main centres, Rotorua (6%) and Tauranga (3.3%) recorded the most home value growth on average in the December quarter, with the latter recovering from a small deficit in the previous month’s figures. New Plymouth (0.4%) recorded the smallest increase on average, while Auckland (1.9%), Wellington (2.4%) and Christchurch (2.5%) continue to experience relatively robust growth by national standards.

Quotable Value (QV) operations manager James Wilson said the latest data demonstrates how volatile value trends can be, given current market conditions. “With relatively low sales volumes in many markets across the country it doesn’t take much change in activity to change the overall value performance,” he said.

“This slight stalling in the rate of home value growth nationally could well be a result of the increase of new property listings and stock available for purchase, which came to the market throughout the last few months of the year and allowed supply to balance demand in some key markets, thereby suppressing competition.

“In the short term, this influx of new listings should result in market activity increasing throughout January and February. Competition among those buyers who couldn’t find their next property in 2023 will remain in place to some degree, but this will likely be subdued over the first couple of months of 2024 as it’s met by an increase in stock available.”

Notwithstanding unforeseen extreme weather events such as those we experienced around this time last year, Mr Wilson expected home values to continue to strengthen at broadly similar levels over the next few months, then eventually slow as we move into the autumn months.

“High net migration remains in place, increasing demand and putting pressure on the rental market, and the expected reintroduction of interest deductibility for property investors will also certainly impact the housing market. However, the biggest handbrake to home value growth right now is interest rates, which are expected to remain at current levels throughout much of 2024 as the Reserve Bank looks to reduce stubbornly high inflation levels.

“While many buyers and sellers remain relaxed to the impacts of climate change and natural hazards on their properties, the winds of change are beginning to blow, so watch this space in the year ahead. The nationwide land risk classification framework that is currently being assessed across the country also has the potential to significantly and quickly change the housing market in higher risk areas.”

“Insurers have already signalled their intent to re-price or remove the ability to insure within certain risk areas, which will change the game for some locations and re-set value fundamentals,” he added.

Keep reading for a regional breakdown of the latest QV House Price figures — or search here to discover the latest value of your home.

Northland

Home values continue to strengthen into summer across the wider Northland region.

Home values increased in the Far North and Kaipara by 1.5% and 7% respectively in the last quarter of 2023. However, both districts ended the calendar year in the red, with values falling by an average of 5.2% last year in the former and by 2% in the latter.

In Whangarei, the average home value reduced by 7% in 2023, despite increasing by 1.7% in the last three months of the year.

Auckland

Home values have continued to strengthen in Auckland this quarter – albeit at a slightly reduced pace overall.

The average home value increased across the wider Auckland region by 1.9% throughout the three months to the end of December to finish the year at $1,285,521. It reflects a small reduction in the 2.8% average growth recorded throughout the three months to the end of November last year.

Of the Super City’s seven former council areas, the North Shore (4%) saw the most growth on average this quarter, followed by Manukau (3.2%). Papakura (-1.1%) was the only one to experience negative home value growth, with Franklin’s average home value remaining static.

Auckland’s average home value ended 2023 precisely 4% lower than at the beginning of the calendar year. From 1 January to 31 December 2023, home values on the North Shore almost broke even, reducing by an average of 0.2% overall, while Franklin (-7.9%) saw the biggest average decline last year.

Tauranga

Tauranga has managed to buck the general trend of stalling home values nationally this quarter.

It has reversed the small deficit reported in our previous QV House Price Index, with the city’s average home value increasing by 3.3% to $1,035,546. throughout the last three months of 2023, finishing the calendar year just 3.8% lower than it began.

“Tauranga’s average home value has now increased slightly for the third month in a row, which indicates that the market has stabilised now,” said local QV registered valuer Meghan Crowe.

“Tauranga’s population continues to grow, which brings with it fresh demand for housing. Though high mortgage rates are likely to continue to impact buyers and owners. The next six to 12 months will be interesting – local real estate agents report some positive market activity post-election, with more properties likely to be coming to market.”

Waikato

Home value growth is sporadic across the Waikato region.

Though residential property values have increased by an average of 2% across the wider Waikato region this quarter, they have declined in Hauraki (-2.6%), South Waikato (-0.1%), and Waitomo (-6.4%).

But Hamilton has remained steady, with the average home increasing in value by 1.1% to $784,920 this quarter – just a fraction of a percentage point less than in the November quarter – finishing the 2023 calendar year 4.3% lower than when it first began.

“This increasingly diverse up-and-down market can be attributed to lower transactional activities throughout the festive period,” said local QV property consultant Marshall Wu.

“The trajectory of inflation and interest rates will be crucial for the housing markets in the year ahead. With inflation levels surpassing forecasts and labour market conditions tightening, there is a growing consensus that the prospect of maintaining a high interest rate throughout this year remains likely. A heightened cash rate poses a clear downside risk for housing values in 2024.”

Rotorua

Home value figures in Rotorua continue to be volatile due to relatively low sales volumes.

The latest QV figures show the city’s average home value increased by 6% to $681,163 in the December quarter to finish 2023 1.5% higher than at the start of the calendar year.

Taranaki

Taranaki ended 2023 with an average 1% quarterly increase in residential property values.

Yet South Taranaki was the only local district to end the calendar year in the black, with its average home value sitting 0.7% higher than at the start of the year at $444,705.

Home values in neighbouring Stratford finished last year 5.1% lower on average, while values in New Plymouth ended 2023 precisely 3% lower, despite a small 0.4% increase this quarter.

Hawke’s Bay

Hawke’s Bay’s average rate of home value growth cooled this quarter.

The latest QV House Price Index shows the region’s average home value increased by 1.8% throughout the three months to the end of December – down from the 3.3% quarterly rate of growth reported in the previous index.

The average home value increased by an average of 2.1% in both Napier and Hastings this quarter, but it wasn’t enough to finish the 2023 calendar year with positive growth overall. The average Napier home value finished the year 4.6% lower on average at $753,740, while the average Hastings home was just 0.8% off breaking even at $792,525.

QV Hawke’s Bay manager Damian Hall commented: “While December is generally a fairly quiet month with people mostly winding down for the festive break, we saw a relatively small increase in growth across Napier, Hastings and Central Hawke’s Bay. The general consensus is that confidence is growing, especially since the election, but interest rates are still the biggest factor and whilst we are seeing small increments of growth the market seems to be holding tight for now.”

Palmerston North

The rate of home value growth has slowed only a little over the festive period in Palmerston North.

The city’s average home value increased 2.4% to $642,417 this quarter – down slightly from the 2.7% quarterly growth reported in the previous QV House Price Index. That figure is just 0.9% lower than at the start of the 2023 calendar year, compared to an average 4.2% decline nationally.

Local QV registered valuer Olivia Betts said the data continued to show steady upward movement since mid-2023, following a significant drop in house prices.

“The overall feel in the market is positive, with an increase in confidence. So we would expect to see a continuation of this trend in 2024, with steady, slow upward movement in house prices,” she said.

Wellington

Home values continue to strengthen across Wellington.

The region’s average home value increased 2.4% to $858,227 throughout the three months to the end of December, finishing the 2023 calendar year precisely 3% lower than at the beginning – a far cry from the 18.6% average home value decrease it experienced throughout 2022.

Hutt City saw the largest average home value increase this quarter at 4.8%. It was the only district to finish 2023 in the black at just 0.1% growth for the calendar year. Upper Hutt was the next closest at 1.2% negative home value growth for the year.

Local QV senior consultant David Cornford commented: “The market continued to strengthen in the Wellington region over December, with another month of modest value growth recorded in most areas. However, the market is likely to be fairly quiet until after Anniversary Weekend, when we typically see a flurry of new listings come on.”

“We’re likely to see continued modest value growth over the coming months driven by high net migration, a shortage of listings, and motivated first-home buyers. A significant resurgence in the property market is only likely to occur when there has been a meaningful drop in interest rates,” he added.

Nelson

Home values continue to slowly build across the top of the South Island.

Nelson’s average home value increased by 1.5% to $777,113 in the December quarter – up from the 0.6% quarterly home value growth recorded back in November – to finish the 2023 calendar year 3.7% lower overall.

QV Nelson/Marlborough manager Craig Russel said migration to the region continued to be strong, helping to fuel demand for property.

“Looking to the year ahead, it’s likely we’ll see further changes to the bright-line property rule by reducing the holding period down to two years, which would apply retrospectively. This may result in an oversupply of properties. Meanwhile, interest rates are expected to remain high for much of the year before potentially reducing towards the back end of 2024.”

In neighbouring Tasman District, the average home value reduced by 7.2% to $772,508 in 2023. Marlborough property values showed more resilience at 3.3% negative home value growth for the calendar year and an average home value of $699,631.

West Coast

Home values continue to strengthen on the West Coast.

It was among just a handful of regions to record positive home value growth on average in 2023, with a relatively strong final quarter pushing its calendar year total to 2.8% overall.

They increased in Buller and Westland by 5.1% and 5.9% respectively, with the average home now valued at $345,653 in the former and $441,584 in the latter. Grey’s average home value dropped 0.5% in 2023 to finish the year at $388,619.

Canterbury

The QV home value index shows residential property values across the overall Canterbury region have increased by an average of 0.2% this year.

Further for the quarter ending December 2023 the average home value increased across the wider region by 2.3% which is up slightly on the 2% growth recorded in the quarter to the end November with all districts experiencing positive growth, except Mackenzie.

In Christchurch, the average home value has increased by 2.5% to $752,974 this quarter, which is again a slight improvement on the 2% quarterly growth reported in the previous QV index. The average home value is now 0.2% higher than at the start of 2023.

The wider Christchurch region has also experienced growth with the index showing the Waimakariri and Selwyn Districts recording average quarterly increases of 2.5% and 1.3% respectively.

Local QV registered valuer Rod Thornton commented: “With regards to Christchurch and surrounding districts the latest quarterly index figures are similar to the previous months and while the market is made up of many segments they do show a general trend of modest growth following a slowdown of the market and easing of values around late 2022 and early/mid 2023.”

“However, anecdotal evidence suggests there was a general slower period before Christmas and the jury is still out on the effect of higher interest rates and the high cost of living may have on the market in the next few months.”

Otago

Home values continue to slowly increase across Dunedin.

The latest QV House Price Index shows values increased by an average of 2.8% this quarter. The average home is currently valued at $627,300, which is 2.5% lower than at the start of the 2023 calendar year.

Home values have also risen across the wider Otago region, with Waitaki (3.9%) and Central Otago (3.6%) increasing the most on average.

Local QV registered valuer Rebecca Johnston commented: “Real estate agents are now reporting increased open-home attendance and multi-offer situations, along with an increasing number of investors moving back into the market for existing homes after 2023 was mostly dominated by first-home buyers.”

Queenstown

Residential property values continue to grow in Queenstown.

The average home value increased by 3% to $1,777,834 throughout the December quarter, finishing the 2023 calendar year 3.6% higher than when it started.

Invercargill

Home value growth continues to be slow but steady in Invercargill.

The average home in New Zealand’s southernmost city increased in value by 2% in the December quarter to finish the year at $477,532. That figure is 2.3% higher than at the same time last year.

December marked the sixth month in a row that home values have increased on average in Invercargill.

Keep track of all these value movements and more via our interactive QV House Price Index — or search here to discover the latest value of your home.